A new study has aimed to rank expat destinations by their cost of living, in order to deduce the most expensive expat destinations in the world. The study, by ECA International, who offer solutions for the management of employees around the world, used a basket of “day-today” goods to decide just how expensive each location.
The extensive study included considerations toward the cost of groceries locally, leisure services, recreational goods, clothing, electrical goods and the costs of driving. The costs of housing and education in each destination was omitted from the final score, though ECA are keen to point out that these are often covered by separate expat packages, so these costs may not be carried by individuals as opposed to their employers.
The annual Cost of Living Survey makes for some truly fascinating reading, with many anomalies that you might not have considered.
Where, for example, do you think the most expensive place in the world is for expats? New York perhaps or Hong Kong maybe? Not so says the study, which rates these destinations 20th and 12th respectively.
According to ECA the most expensive expat destination is South Sudan, closely followed by Angola. This seems an odd result when so much of the population here is living in poverty.
However there are a number of reasons for these surprising results. For one, a lack of development means that many of the products that expats expect as standard are rarely available in these areas, so they must be flown in at great expense.
Secondly, safety and security are constant concerns in these areas, and so considerable money can be spent on personal security. This insures that expats in areas of civil unrest are able to reduce their risks as much as possible.
Lastly with many expats being paid in US Dollars, the currency in South Sudan and Angola is such that your pay packet might not go quite as far as you’d hoped.
Perhaps less surprisingly Switzerland then makes up the next four positions with, in order, Zurich, Geneva, Bern and Basel taking positions three to six inclusive. Switzerland has long been pegged as an expensive country, at least part of which is a response to high taxation. That said, this tax money then fuels an impressive range of high quality public services such as the much-respected public transport system and an impressive range of top quality medical establishments.
The Democratic Republic of Congo, Shanghai, Beijing and Seoul round off the top ten most expensive destinations for expats. Interestingly the UK doesn’t even make it into the top 30, suggesting that many people’s long-held view of “rip-off Britain” may indeed be quite some way from the truth.
The most important takeaway however is this; when you’re considering overseas job opportunities make sure you take into account the costs of living in your potential destination. In doing so you’ll be able to gain a better idea of the likely financial impact of moving abroad, and will be better placed to commence informed negotiations over a suitable expat package to offset these costs of living.